Teads slashes 10% of workforce amid 90% market value drop
After a disastrous year, Teads aims to save $35-40 million annually by laying off another 180 employees, 10 months after already cutting 200.
Teads, the company formed through a merger between Israeli advertising firm Outbrain and a French company, will lay off 10% of its workforce. This marks the second round of layoffs since the merger. In the previous round, 10% of the company's 2,000 employees were let go, leaving about 180 employees for the current round. While the first round largely spared the company’s Israeli operations, this time the Israeli branch will also be affected. However, the development departments, which make up the majority of the company's employees in Israel, are expected to be relatively less impacted.
Teads estimates that the layoffs will save $35-40 million in annual expenses, but the company also expects a one-time cost of $8-12 million for severance payments and related expenses. Most of the layoffs will occur before the end of this year, with some extending into the first quarter of 2026. Teads shares jumped 20% in pre-market trading on Wall Street, though the company’s market value remains modest at approximately $70 million.
Outbrain, an online advertising company, went public in 2021 with a valuation of $1.1 billion, but has since experienced significant declines. In 2024, when its market value had fallen to around $200 million, Outbrain executed a reverse merger with Patrick Drahi’s French company Teads, valued at $1 billion. Outbrain paid $725 million in cash for the deal, mostly financed through debt, and the merger was completed in February 2025.
However, the merger has not improved business performance. After reporting third-quarter financial results that disappointed investors, Teads’ stock plunged 40% in a single day. Revenue totaled $319 million, below forecasts of $340 million, and losses came in at 17 cents per share versus expected 10 cents. Operations burned through $24 million during the quarter.
The merged company is focusing on the connected television (CTV) advertising market, though this segment remains relatively small, expected to contribute only $100 million in revenue this year. While investors have expressed some approval of the current cost-cutting move, uncertainty remains whether a 10% reduction in staff will be sufficient, given the company’s workforce remains high relative to its current revenue levels.
